An estimated 15,000 new cases of myelodysplastic syndrome (MDS) are being diagnosed annually in the United States alone. The average age at diagnosis is about 70 years. Forty percent to 50% of patients die with infections or hemorrhage due to peripheral blood cytopenias; others develop acute leukemia. While hemopoietic stem cell transplantation offers potentially curative therapy, only a small proportion of patients are currently eligible. Additional therapeutic strategies are needed. Recent investigations have focused on the pathophysiology of MDS in an attempt to identify therapeutic targets, and several leads are promising. To further improve treatment success, studies are needed that show correlations between patient and disease characteristics on one hand and response to a given therapeutic strategy on the other. We showed in a pilot study that treatment with antithymocyte globulin (ATG) to inactivate autoreactive T cells, plus etanercept (a soluble TNFa receptor) to protect normal hematopoiesis, provides effective therapy for a subpopulation of patients. The present Phase II protocol is aimed at substantiating those findings and at correlating responses with the function of autologous T cells and specific responses to TNFa. The study will enroll patients with low or intermediate-1 risk MDS (by the International Prognostic Scoring System (IPSS). Specific Aim 1 is to determine the rate of sustained responses to treatment with ATG and etanercept and to identify patient characteristics that correlate with responses. Specific Aim 2 is to identify disease parameters and in vitro characteristics of marrow cells from patients with MDS, which correlate with disease course and response to therapy, with the objective of applying that information to the design of future more specific therapeutic interventions. Specifically, we will characterize marrow cells before and after therapy by multiparameter flow analysis, we will determine WT1 expression, we will assess the T-cell repertoire and CDS anti-WT1 reactivity before and after therapy, and we will determine whether there is a correlation between the presence of the HLA-DR15(01) allele, MHC class II restricted T-cell (CD4) responses, and TNFa effects. These studies are expected to improve our understanding of the pathophysiological features of MDS that are amenable to therapy with immunosuppression with ATG and modulation of TNF-mediated signals. The studies are also likely to provide further insights into the role of WT1 in marrow failure in patients with MDS and thereby establish a basis for antigen-directed therapy. Overall, the trial is expected to more clearly define the role of combination therapy with ATG and etanercept in low grade MDS, and to identify disease characteristics that can be exploited for the development of new treatment strategies. [unreadable] [unreadable]